This series of articles is inspired by legendary author, the late Stephen R Covey, whose bestselling book, The seven habits of highly effective people, impacted millions of people around the world. FSPs will do very well to consider the habits highlighted in these articles.
As a quick reminder, Covey asserted that the following personal habits would lay the foundation of success:
1. Be Proactive
2. Begin with the End in Mind
3. Put First Things First
4. Think Win-Win
5. Seek First to Understand, Then to Be Understood
7. Sharpen the Saw
The first habit
In the first article on the essential habits of highly successful FSPs under COFI, I highlighted the importance of defining reality and to be proactive. The reality is that COFI is upon us, and it will impact your business. Best be proactive and start preparing for the next wave of regulatory reform.
The second habit
Seek first to understand, then to be understood
Our industry is full of opinionated individuals, including me. Looking back, I am often ashamed of how many times I have been quick to express an opinion on a subject before fully understanding the context and its fundamentals. For any one of us to assume that COFI will simply be a ‘cut and paste’ of FAIS will be a mistake. A word of caution – Assumptions about COFI based on uninformed opinions may be the downfall of many FSPs. One thing is for sure – it is not simply going to be business as usual under COFI. Yes, there are many principles in FAIS that will be incorporated in COFI, but it will definitely be necessary to reassess, and stress-test your business and your client engagement process before conducting business under the new Act. My advice: Seek first to truly understand the fundamentals of COFI before expressing an uninformed opinion and potentially leading your team in the wrong direction. One of the first aspects of any piece of legislation that one needs to understand is the purpose or objective of the Act. It applies to all financial institutions, which creates a level playing field.
The objective of the Conduct of Financial Institutions Act
To provide for a regulatory framework for the conduct of financial institutions that will—
– protect financial customers, including by promoting the fair treatment and protection of financial customers by financial institutions;
– support fair, transparent and efficient financial markets;
– promote trust and confidence in the financial sector;
– support innovation and the development of and investment in sustainable innovative technologies, processes and practices;
– support sustainable competition in the provision of financial products and financial services;
– promote financial inclusion;
– promote transformation of the financial sector; and
– assist the South African Reserve Bank in maintaining financial stability; and to provide for matters connected therewith.